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tv   U.S. Senate  CSPAN  March 8, 2013 5:00pm-7:00pm EST

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hear talk like that. .. when we broke our report we wanted to answer this question and. that is what you have surrounded your self with the world's smartest people and you and your
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colleagues are doing something no one in the world does and it's working. how do you know when a major disruption to your program is sneaking up on forseen behind you. how do you detect that when you are surrounded by smart people everything is working fine. there are no red flags but he warned in a risky enterprise. it doesn't have to be space shuttles. it can be anything. how do you know when a major tragedy is sneaking up behind you? you have to be able to answer that question if you are going to be in an oversight position of risky or hazardous enterprise. it doesn't make ed differences of the nuclear plants, submarines, boeing 787 design,
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it doesn't make a difference what it is if it is a risky enterprise you better know the answer to that question so we attempted to answer that question with a set of principles. in the beginning of that answer relates to, again i am plagiarizing from another author and that is the engineers embargo i think you probably heard the sinology before. and when you create one of the marvels, this bargain refers to the peaceful use of power for electric generating electricity. but when you create one of these engineering models with it comes a responsibility to take care of it forever. like he made a bargain with the devil for his soul. his answer to that question was
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quoted up there by john. the question is when we created this wonderful machine called the space shuttle, did we live up to our bargain to take care of it forever? that's also the answer. it doesn't matter whether the space shuttle's we are talking about or any other risky enterprise. after the shuttle -- i want to ask leni to put one of his graphs up but i'm not going to do that because one of his graphs is startling to me. after the shuttle experience i had to go on the speaking circuit and i spoke to a lot of people that do hazardous things and they wanted to know about risk assessment and risk management and are a use a kind of checklist about what are the
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characteristics of companies or organizations that do risky activity but do it well. you're a learning organization, do you advertise the near misses, we have all these characterization's. and everybody is julian pressed and enjoyed my talks except one group, one type of audience who would have nothing to do with any of those principles. of those are alien and the antithesis of what they do and that is the medical community by the way. they don't do any of those things. they hide their near misses, they don't learn from their mistakes. but anyway i never got invited [laughter] you what to think about that, the medical community in this
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country and most places is not interested at all in any of the principles of how to manage risk. so we did. we worked out a matrix checklist of the characteristics of good management and risky activities because we do want to do risky activities. there is no progress unless we do these risky activities. it could just be chemical production plans where people make paint or something like that. we applied that matrix checklist to the space shuttle program and it comes as no shock to you that in our opinion they failed miserably. they failed in every aspect. so then we said well, what happened here? why this room filled with the smartest people who are doing this unique thing that nobody else in the world does and it's working hell did they let this
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happen so that's how we got into the world of business and policy and politics and the national will and all that kind of stuff which i won't go into. then to make matters worse, i have always had the philosophy in any challenge that i've ever had in leadership positions for years and years and years that there are no new problems. every problem has already been solved pity if you just go back and pull out the file from years ago you will see someone solve that problem. there is a history to everything so i insisted that we understand the history of this accident and the history of nasa. so we did a considerable loss amount of research on things like the investigation into the concord accident, for example.
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some of you may not know this, but the national investigation commissioned by the french government came up with the wrong answer. remember that? they got it wrong. well, we wanted to learn from that so we studied that and challenger and this is where sally comes and who made an enormous contribution to the board during a press conference that when she made the famous statement that i'm hearing echoes of challenger. we were well into this when it dawned on her and others that of the deep-rooted organizational problems issues which allowed the columbia accident to happen would be identical and the
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organizational problems and challenges which allowed the children to happen. this hit her if she didn't believe that this had happened. so we then frame -- this is the background and these large philosophical kind of issues as our guide line we then grow our report. and i give you an example. without any coordination here, wayne came up with the same structure he we had a 15 return to flight requirements and as joe said, nasa holding 12 of them and then we have some long term recommendations that we felt nasa should implement and from our point of view that's not the best way to organize the
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return to flight or organize the findings particularly the report to flight findings. in our structure, knowing that you could not prevent the debris from striking the orbiter completely unless you shut it down our structure was the first thing we came up with recommendations that could be grouped into a category that said first we have to understand the materials that you are dealing with. when we asked nasa to tell us about the strength commercial was the testing and standards of the rcc there aren't any. they don't understand the strength of the rcc. thome is not allowed. number one, the exteriors. okay. so the first thing we said we came up with recommendations that said you have to understand the materials that you are dealing with.
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second, the launch cameras facilities observations and imaging facilities at the kennedy center had been allowed to degrade slowly as they break or degette obsolete so that was not good imagery of the shuttle launches so the analysts couldn't tell whether or not a serious event had happened or not and so the second group of recommendations was you have to be able to witness and analyze and launched a higher degree of accuracy. third, this is something that struck us privately. we went through the whole sequence of boards and
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committees and checklists and months and months of signing things am going to meetings and certified in and you have that - ascent the trouble that fire, heat and light, sound and all that energy it gets 17,500 miles an hour but as we know from physics 101 every bit of energy put into that shuttle has to be taken out in order to come to rest on the landing. nobody certifies about coming back with all that energy. what are you going to do with all that energy when it comes back and there's not a lack of effort that comes back to read this decertifying the shuttle to come back. there was the honorable inspection that's part of this overarching thing that okay now we have to go back to the we
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have to have some kind to the inspection. we didn't specify you have to have some rudimentary repair capability then you have to recertified the shuttle to come back and some kind of a provision for a safe haven rescue. now some of those things couldn't be done. but we didn't care about that. we very, very carefully worded, for example, the requirement for the earth repair. it didn't say you can't fly until you can do the on orbit repair. it didn't say that he is said to the best you can, get to work on it and we were very careful about that. there's kind of a high your order scheme going on when we wrote these things.
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the investigation didn't need any difference. the first return to flight, what happens? degette struck by a large piece of debris. how big, how fast, the damage the order? it turns out the got magnificent images and great cameras. what do they do? bigger left into orbit and expect it very carefully. no damage nothing was hanging out between the title and little tiny pieces. this orbiter is ready to go back and safe to go back guinea and recertified for entry. you think i didn't feel good about that? yes, i did. then the issue of the long-term cultural organizational issues section of the report i'm going to get back to the technical authority and stuff like that. i'm going to get back to that in
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a a minute. the overarching issues that struck us was with one since the entry involved just as much energy and just as much fire and light and heat as the launch, why isn't more attention paid to that so we took care of that. is this an experimental vehicle, test vehicle or and operational vehicle? if you can't you answer that question, you can't get -- if you inserted incorrectly, you will go down the wrong path. and then one of the other issues of course we spent a lot of time on and money was spent on a lot of our report was spent on the gate guard at the johnson space center told me is foment cannot hurt. you can go to the cafeteria and
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workers in the cafeteria would tell you if, cannot. so that was appalled help for us and why we spend all the money to take the rcc off of the enterprise. the last thing i want to talk about them is this long term kind of recommendation to the most of portend has been alluded to several times to become and i can't give you a report card for it because i'm not in nasa and nobody asks me to check on it. the recommendations that we have made having to do with the independence of the engineers to create what he called a technical authority the separation of engineers and safety at mission insurance people out of the operation schedule payload people because the missions are just not compatible. we've made a lot of recommendations about what,
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changing the culture. that was left for nasa to do at their own pace. ra remain committed that they are just as important as the return to flight recommendations and as a matter of principle for the future of designing any spacecraft that the principles are applicable this you cannot allow the guy that is responsible for the scheduled cost and payload to trade engineering safety insurance you just cannot run a risky enterprise not just shovels that anybody so that's all i'm going
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to say. that is kind of up in the clouds of where we were and then we shredded it down to writing specifics so people could understand and take actions on. we don't want to write something that was so generic you can use it. but we had overarching philosophical viewpoint that for example the management of the space shuttle program was so inappropriate that if you didn't lose the shuttle next week he would lose it next month. the program was incapable of managing a risky enterprise and so then we shredded it down to other things. i'm not going to bore you anymore but i will talk that any part of it that you're interested in anything you want
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to talk about. one of the questions i get asked is the program of 95% contractors did that have anything to do with it? absolutely not. but i would be willing to talk about that. we've investigated that. when i left my little home i had to check under my car every morning because i had to be careful because we are dealing with some big plays here -- big boys but there's other issues like that that haven't been brought up and i would be happy to talk about it. but i do want to say that there are several questions today about how do we capture, how do we not lose the spirit and the lessons learned, this is how you do it. so thanks for coming. i don't know if we have enough
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time. >> can i see one thing before we start a not say how important it was that they did the mandated test was done on their research we saw the video release year and i know that i was sitting with a group of senior officials in the conference room in the tv of the test as it was going forward and we all knew that nothing was going to happen. they would fly. at the weighing and you could have $1 million in that room with a bet that something was going to happen because we were all convinced and i put myself in that category that nothing was going to happen to the rcc when they shot the foam at the wayne and sometimes it takes a significant emotional event to change people's mind and there is nothing like a real test of engineering data to prove a point. you've got to do the math, you've got to do the test, and when you do you got to allow yourself to be convinced.
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>> the size of coal is the most amazing thing. it was exactly the size we predicted. >> thank you for taking the time for being here with us today. you have a long history and experience of course in the naval operations and other investigations and things that have been done. can you talk about how nasa is similar to the -- to talk about high risk organizations, but when there's like a naval submarine problem or carrier problem so forth, we don't have quite the sort of national visibility that the human space flight program has a. so, is that because of the difference simply in its political symbolism, or is it because it's technically different for some of the difference is that wayne talked about, why do we approach the human space flight issues differently or the same as other
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highly reliable the organizations do? >> first of all come to mean there is one overarching similarity between nasa and other people that do difficult challenging things. the similarity is in my opinion having the number of organizations and investing in a number of organizations all big bureaucratic organizations are just like organic entities. in that i mean tougher stand overarching goal priority of any organic entity is self
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preservation and big bureaucratic organizations are just like that. so i knew when i started this that the immediate reaction of any bigger bureaucratic organization, and i don't mean bureaucratic -- bureaucratic isn't a - term, i mean any big organization with lots of lawyers and stuff like that are going to go into a defense approach guaranteed and will go into a defense approach. i see it every time i do one of these. so, as i counseled my colleagues i counsel them and out of this and we tried to deport ourselves in a matter to allow some of the fierce that were here. the press used the like to quote me all the time saying fat when we went around nasa and talked to people i used to say unless you have a pilot, outside of the secretary of your office you
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don't have anything to orie we aren't going to name names nobody is going to get hurt unless you have a secretary that potted plants outside your office don't worry about it. that eliminated 99% of the people in nasa. the difference is though the difference there are major differences only in a minor sense. so, what we tried to do when we wrote to this report was to write the recommendations, findings and recommendations generically in the sense that they would apply to anybody that does risky kind of things. you will notice in here that we didn't name any names or find fault. we didn't accuse anybody of anything. but yet there were names in there of people who did some pretty strange things.
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so, other than the obvious factors like space shuttle is a big national program with lots of visibility and stuff like that i would minimize the difference any kind of organizational difference between nasa and anybody else that does risky things. the principles are the same, the risks are the same may be in the case of nasa there are some differences like if you crash to many space shuttles it would cancel the program or something like that, but that's true of experimental aviation. it's true of -- we can't get a station nuclear power plant built into this country because of the risks. it's very similar. i don't like -- i would not like
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to suggest that somehow nasa is wildly different from anybody else that has to manage a risky activity. >> yes, sir. >> has anyone thought or applied the things we are learning here to the space station? is it safe? what we say if i can let me address the space station program did take the report and they went through it very thorough to see if they have the same kind of characteristics and there were some changes made in the organizational of the international space program office as a result of the columbia accident investigation board, so it was addressed. >> the a plank of the new software during the time that
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when you upload a new operating system sometimes that happens and they were out of communication for a couple of hours, and then they leave the computer and the light went on. with the space station by the way they also had a communication assets through the russian ground stations that were unaffected >> [inaudible] >> the question most of the lessons been applied to the programs like the international space station which are still
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ongoing one of the things that we did when we wrote this report was we went out and examined him and management of a good number of risky enterprises and one of the ones that got a lot of publicity that we were struck by is not the navy nuclear program, but the navy submarine program, two different things. it's true they have nuclear propulsion, the loss of the navy submarines had nothing to do with their reactor plans. they failed and were lost with all hands on board because of other reasons, and so that program then went and did soul-searching just like this and then went and did some revision to the practices and policies and so we went back 15 years later to see whether or
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not they had regressed and had forgotten them and they had not. they had all of those characteristics including one of the ones the was on last when they have a technical authority which is separate from their management organization the technical authority owns the specs. now the manager can leave it. he says okay this mccalls 43-inch bolts and and when to let it get away with a two and three-quarters inch but the sec says three. if somebody comes to them and says well, we want to get a waiver and the loss's program manager is sitting there and of course to come to him with power plants and get all of the reasons why they should grant this waiver someone is required
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to make the counter argument and they take turns to the assignment to argue against a staff position as rotated among the senior leaders. you have to do it. and when it is your turn, your grade is based on how well you give the counter argument. there is no stigma against arguing against the staff because everybody has to take turns doing it. a very clever. so the program manager, the boss, whoever it is his objective is the powerpoint nose at least someone is going to stand up and say this is why we shouldn't do it. a very powerful. and there are lots of things like that. i can't speak to help was applied to the station. good question. >> thank you for taking the time to do this today. i recall in the report there was a lot of discussion about
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scheduled pressure and now ten years later we are hearing a lot about another factor that may affect some of the same complexity than the unef address and that is affordability and trying to organize the program in a leavitt is more affordable over the long term. could you just address a little bit any pitfalls or suggestions you might see or making with regard to that particular factor making the kind of decisions. >> that question applies to every program even if your proctor and gamble, the question of affordability schedule. it's a good honest question and
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i would say the case. stick to the principles that we suggested in the report year and that is no matter how much money you have even if you only got $2 you spend 1 dollar on engineering and safety and reliability you spend 1 dollar production and keep them independent. and if somebody comes up and says well, boss, we are not sure how the system is going to operate we haven't had time to tested and certified it. here are the risks if you want to go ahead, just go ahead. let me give you a good analogy. let's not good at ten years let's go back 20 years to get suppose 20 years ago bryan
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o'connor had all the money and all the people he ever wanted and they did a complete study of foam shedding and what is the name of the council that -- i can't remember the name of that committee. flight readiness reviews. he comes up and says you know, foam is still coming off. it's not supposed to. we don't know what to do about its. nasa of course work on that foam forever. we are acting like nasa ignored this problem triet nasa did not ignore this problem. they redesigned the ramp, they redesigned stuff, they tried all the time to stop foam from coming off but they couldn't do it. secure i am. on the guy that has plenty of engineers to be studied this problem. i know all about it.
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i go to the flight readiness review a and say you know it's probably going to come off and hit the shuttle again to i don't know what to do about it except to ground the shuttle to get okay what is the answer to that? you want to shut the program downfield pfft because we can't stop the foam from coming off? the only thing i can say is that what we were upset about in this particular report is the risks were not being properly analyzed and briefed. they were being ignored. once you know the risk if you decide to go ahead with the known risks, then you are doing it in an informed way and this was not the case here. >> let me have a little perspective from one point of view on the cost and schedule. >> it was one of the articles as i was growing up in the organization and the shovel
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organization manage the design was compromised largely because the owen be put the camp of the $5.5 billion, 5.8, thank you, they're about the 1970's on the development of the shuttle and therefore we couldn't build the shuttle that we really wanted to build that would be optimum from the engineering standpoint. after bill parsons handed me the baton and went on to other things i became increasingly to get visited by bob thompson will was the original program manager in 1972 through 1981 incredibly long tenure, and she just -- i can't imitate him. he would let me know the truth of the matter was from the ball thompson perspective coming and his perspective was there was no way we were going to build back that booster and more complicated shuttle thing
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because the technology wasn't ready no matter how much money they gave us. the fact the cut the budget provided me a good excuse to build the shuttle that we could technically build. kind jay revisionists history from my point of view. i will also tell you that there was a why is saying and i have seen it to be true in my own life and i mention here, so i am guilty of this to give them unlimited resources and infinite time great engineers will produce exactly nothing because they always want to improve their design. this wasn't good enough. i would like to give it another shot and make it better. having the cost limits and scheduled limits are actually good when you are trying to build something. i know cost and schedule can drive people to do stupid things sometimes but they are effective life and a good program manager and a good engineer and we will learn how to deal with those.
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it comes to the point you can't do that then we need to stand up and raise your hand and say we can't do it and we should not do it. but most of the time you try to do what you can get in those countries because that is the real world. >> to the estimate is the work done or is there more to do? >> what work? the tava doesn't exist anymore. i got asked in the testimony before congress i got asked twice once before the house and once before the senate on this cultural thing. how do we know if nasa has changed as culture. i said well if you wait a couple of years and bring it back we could tell you in ten days
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whether or not it has changed. no one ever called us back. the work is never done. ask joe said in the remarks we want to do risky activity. there is no progress unless you do risky activity. it's just that there is a right way to do it in my opinion, so the work is always on going to manage and ss av risky activities. even in driving e electric cars has some hidden risks. suppose you have an accident and you have 24,000-volt battery in the back. there is risk. >> the work isn't done because we have a new generation to educate who didn't live through this, who didn't have a personal experience. they need to have that.
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i would tell you there are people out in the world right now trying to be done to the to design the low earth orbit and some of us find part of a living and trying to give them advice on how to do the right and that work is going forward right now. so yes the work is ongoing. >> i think space is about to kick us off the stage. i want to make another comment. i've heard and i've made some notes about the primary cause of the accident or proximate cause and the contributing causes and things like that. we didn't use that model in the report. for example, chapter 8 history caused this accident. not history contributed to its. why does the shuttle have wings?
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anybody know the answer to that question? i will tell you john taught me this. no other reentry vehicle in the past or in the future had wings. i'm not going to tell the story but the story does indeed need wings. why does it have engines. it's a glider, why does it have three of these 25,000 count engines? the answer to that is because the political decision at that time the shuttle was approved required that would be a reusable flight vehicle and the engines for one of the most expensive parts about that. they put a pound in orbit with 75,000 pounds in orbit that they've never used in orbit.
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so history -- i want to make sure the people in this room go out with the understanding that in our opinion the organization of the space flight program was not safe. the organization allowed this accident to happen. they didn't contribute to it. they caused. history caused it. the political decisions made by the nixon administration created this dinosaur and caused this accident to have been -- happen and that's our opinion. >> it's not technology.
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it's partially technology, but after the apollo program -- you grade this. let's see if i got it right. after the apollo program -- nasa came up with a plan and the plan was orbiting space stations which were going back and forth to get at the time the vietnam war was over and inflation was raging so the omb and the white house said how much is this going to cost? nasa it comes up with a number and they get thrown out. i mean, the agent couldn't even afford a quarter of that. so, to make a long story short after going back and forth and back and forth, the white house goes to nasa and says what we will do is prove the truck to go back and forth, but you have to go and capture both the dod
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launch business and the commercial launch business to make this a revenue neutral program. at the time this is the late 60's, early 70's. at the time this is no longer classified information. the u.s. spy satellites took pictures. the satellites had hundreds of little cartridges and they would take pictures and shoot the film alton and re-enter into the air force with a great big horns on the end with snagged the parachute out of the air and get the field castor and develop it. so, the dod said if you want our business, this has to go above our bet, rendezvous to the satellite, you get the film,
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come back down to earth and the land in one or it. but the trouble is of course as you know, and 90 minutes to launch plight has moved 600 miles off the or that some you have to have names so the shuttle can fly to the landing site so they put me in a sonnet. they got the dod business and never once did they ever go to a satellite and recover the film. but now we have a vehicle that has wings. how did i do, john? [laughter] >> we are a little bit over schedule. but i love this discussion and i can probably go on some of my
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students know at link, historical period. let me not stand between you and the reception which is just under the stairs and to the left and we would like you all to join for a little refreshment after a long and very thoughtful and educational day. thank you for coming and the folks that are covering this event so it will be on c-span. we are going to get the charts and post them on the web site as well and also like to of thank aiaa for this happening and lockheed and boeing who wanted to contribute to the ongoing need to continue to learn lessons evens the happened long ago are still with us today. with that i would also like to thank the admiral for sharing themselves with us today and for being a part of our day.
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thank you. >> this was part of a daylong discussion with staff in the control room at the time of the shuttle explosion. was later discovered that a piece of foam had damaged the under side during takeoff when it came off the main fuel tank all seven crew members died on february 1st, 2003. you can watch this again tonight at eight eastern on c-span. here is a look at our prime time lineup on the c-span networks.
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the justice department's consumer protection working group posted a summit today focusing on the latest scams and what consumers can do to protect themselves. the group was created by the obama administration investigating financial crimes and consumer related fraud. during the yvette a senior fda officials warned about the fraud scams. here is a look. >> let me read the definition of health fraud. it's a deceptive promotion,emene advertisement sale of product as being affected to diagnose,diag, prevent, cure, treat or mitigati disease or to provide ta beneficial effect on which weon haven't been signed tuesdayly pe
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effective for such purposes. and i think that's and i think that's particularly where we get into the drug arena. a dietary supplement regulated as a approved product tends to make statements that diagnose, prevent, cure, treat or mitigate disease. examples that we see in this arena are statements involving chronic, serious diseases such as cancer, arthritis, diabetes, and sexually transmitted diseases, including but not limited to hiv. you can only imagine what individuals can have, for what can happen to both consumer and as well as other individuals associated with this rumor when taking products that give false hope. unfortunately, these criminals that are out there providing
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these type of dietary supplements with treatments and cures that have never been studied, they feed on the global public and especially in times of panic. for example, during avian influenza, the bird flu panic. what type of enforcement tools does fda have to protect the consumer? fda has both a regular sort options and criminal options. from the registry standpoint, fda can issue warning letters to the subject firm that is subject individual. they have administrative authorities where they can institute and import alerts or import refusal, meaning products that come in from overseas can be stopped at the border. they are some regulatory civil judicial actions that can occur. seizures an injunction.
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and lastly, but certainly not least, fda can investigate criminally. and a lot of times our
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delivered his final speech on the government's priorities before the annual session of the national people's congress. this 50 minute portion of his speech reviews the work of the government during the last five years an alliance with the priorities are for china in 2013. >> translator: deputies, our achievements over the past five years to not come easily but to the vision to the party central committee as well as the concerted efforts and others work of the party and the ethnic groups in china on behalf of the council i extend my sincere gratitude to all workers, intellectuals, officials and members of the people's liberation army, police.
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[applause] i extend my heartfelt thanks to the people of all of our groups to the democratic party's to those organizations in all sectors of the society's. i express my sincere thanks and in taiwan as well as others to the estimate i also extend my sincere appreciation to the government international organizations that have shown the supportive drive.
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>> while keenly aware that we still face problems and difficulties in the economic development in particular on the balanced, and coordinated and unsustainable developments remains a prominent problem and there is a growing conflict between the number of pressure and economic growth and the excess production capacities. enterprises costs by increasing in their capacity to lead the growth of the government revenue is slowing down. while the government expenditures are increasing and there are potential risks in the financial sector.
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the industrial structure is on balance, the agricultural foundation as weak. economics is all that is increasingly in conflict with the consolation and protection to the developmental gap between urban and rural areas and the two regions and is large in the income disparities between these issues. social problems have increased dramatically and many problems in the area of social security, medical care and the environment workplace safety and the public order affects people's vital interest. as some people still leave a hard life and there are many systematic and institutional developed in a scientific way. the transformation of the government sanctions hasn't been
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carried out and some areas are prone to corruption. some of these problems have been over time. while others have emerged in the course of economic and social development. still others have been caused by inadequate sees -- inadequacies and the government work. we should have a strong sense to work with people to discuss these issues more quickly in order to reach people's expectations and never let them down. [applause] >> second, general requirements and the macroeconomic policies and the social development.
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at its 18th national congress the party reviewed its work in the previous five years and historic achievements set forth of the objectives of the moderately prosperous society and deepening reform and opening at an all around way laid out an overall plan for advancing the cause of socialism. did the year 2013 is the first year we are carrying out the guiding principles of the party's 18th national congress and continuing to implement the 12th five-year plan is an important year for leading the solid foundation and for finishing building a moderately prosperous society. china remains and an important program for opportunity during which much can be accomplished. there are many favorable conditions and positive factors
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as well as a number of risks and challenges for china's economic and social development. the profound impact of the global financial product and the recovery of the world economy is full of uncertainty. we should realize the situation is encouraging and remain confident and also that it is complex and shall be mindful of the diversity taking a keen sense of urgency and earnestly to do our work well. the general requirement for this year's work architect the study to implement the guiding principles as the 18th party in congress. the banner of socialism with the characteristics follow the guidance of the importance and the economic development.
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things are developing in a scientific way as the underlying guidelines and accelerating change of the growth model as the task. the deep and reform and opening up implement the strategy of making development more innovation proven and the progress while ensuring stability place is a new trend on the experience and get up to the start, recently promoted the social and economic, political, cultural and ecological progress achieved sustained, healthy economic growth and social harmony and stability. the targets for the economic and social development are increased gdp a 7.7% that coordinates the development.
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the increases to 3.5%. the unemployment rate is at or below 4.6%. the per-capita income for the president's increases with the economic growth and the work and that enumeration rises with increases in the labor production and further improve the bounces. here i wish to explain the target for economic growth and overall the target for economic growth this is a general target letters followed closely by all. in setting this year's target for economic growth and
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developing the 7.5% we have taken to factors into account. on the one hand we need to continue to seize opportunities and promote the development. over the years the capacity of the manufacturing industry has increased considerably, and the infrastructure has improved significantly, which means they are better able to assist in development. the rate of savings has been high and the work force has remained large to allocate the production and maintain a proper level of economic growth in order to provide the necessary conditions and increasing people's well-being to create a stable environment for changing the dearth model and suggesting the economic structure. we are making sure that economic growth is the potential economic growth rate and the ability to find protection and bearing the
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capacity of four resources and the environment. .. [speaking chinese] >> translator: the world prize has always been for control
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target. last year the rise in this city jumped by 2.6%. it's an important result of our assets to curb inflation. and it's also due to the overall economic performance. china is still under considerable inflationary pressure. mainly because the upward pressure and other factors of production in farm products services. in major developed countries, increasingly carrying out monetary policies and inflationary pressure cannot be overlooked. we need to leave some room for adjusting the prices of energy
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reserves. and the carryover of facts of the cpi improves flashier contributes 1% to this year's cpi rate. taking all these into account, they set the target for increases in the cpi around 4.5% for this year. you should effectively ensure the supply of major commodities with those matches that cause with america's prices and keep the above targets. you must continue to implement the fiscal policy and improve its monetary policy. and make them more forward-looking and flexible.
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we will continue to implement a proactive fiscal policy. we should make our proactive fiscal policy play a bigger role in ensuring steady growth, adjusting the structure and the benefits of the people that will increase the deficits. we are projecting a deficit of 1.2, but for a hundred billion more than the budgeted last year. the 850 billion yen at 350 billion yen in bonds to be issued in local governments. the time lack of special tax cuts will make it hard for governor to go back this year.
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but the fixed government expenditures and particular people's well-being and structure adjustments. therefore we deem it necessary to increase the deficit and government data. it should also be noted that china has a relatively low debt to gdp ratio and increased the deficit this year will bring the ratio to about 2%, which is overall at a safe level. sack act, we will improve the tax cut policy as we continue to inform the tax system. disposals will be accelerating the pilot project to replace, improving the way these trials
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are conducted in expanding that to more areas and sectors in a timely manner. third, we work hard to optimize the structure of government expenditures that continue to give priority to spending education, medical and health care, social security and other areas important to people's well-being. expenditures and expenses than perhaps everything we do. investment for the central government budget and government subsidized housing projects, infrastructure projects to agriculture and utility networks and other projects to improve people's well-being with emissions reductions. we will probably handle the repayments and follow-up financing for ongoing projects
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to put in place a local government and keep out an appropriate level. we will continue to implement a prudent monetary policy and maintain a balance between boosting economic growth, keeping prices stable and guarding against financial risks. we will improve the policy framework for exercising control pregnancy and have monetary policy play the role of the targets for growth of the monetary supply is about 13%. we will imply a full range of monetary policy to control liquidity come increased the money and credit supply in expanding aggregate financing for the economy by an appropriate amount.
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we will improve the transition mechanism and coordinate financial oversight and the monetary policy and improve oversight and implementation. we will better allocate financial resources. we will guide financial institutions to increase financial support for structural adjustments to the economy, especially agricultural areas and micro businesses and strategic emerging industries. the last financing channels for the real economy and reduce its financing costs. we will promote steady and healthy development of capital market and guard against systematic regional financial
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risks. we will guide financial institutions to output prudently and tighten oversight over financial risks and sectors and regions and risk related to the balance sheet activities that financial institutions and make financial support more sustainable. suggestions for the work of government this year. based on an understanding, especially the past five years, i wish to make the following suggestions for the government's main work this year. first, accelerating the change of the growth model and promoting sustained in sound economic development. all the achievements we have made in china's organization are
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a tribute to sustain in sound economic development without which we could have accomplished nothing. china is still in the primary stage of socialism and will remain so for a long time. the national condition has not changed, nor has the principal problem in our society, production of the ever-growing material and cultural needs of the people. all china's international position of the largest developing country in the world. development is still the key to solving all her problems. we must achieve economic development is the central task and give it our integrated attention. as long as we make full use of this important. if strategic opportunities,
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bought and development will formulate new thinking on development, solve problems, accelerates change of the growth model and stir change and of course pursue development and promote development while working for change to certainly sustain economic development. [applause] [speaking chinese] >> translator: we should take expanding domestic demand of our long-term strategy for economic development and make full use of the basic function of consumption and the key role of investment. difficulty in an key to expanding domestic demand land consumption and that is also where the potential lies. to expand individual
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consumption, we should have the ability to consume and keep expectations stable to improve the consumption environment and make economic growth more consumption driven. in the current stage, rural investment plays in promoting economic growth cannot be underestimated. china has both investment capability and investment demand. the key is to make investments in many defectors up to the structure of investment and improve its performance and return. governmental investment is important anchored a nongovernmental investment, but its share of the country's total investment is decreasing mms further relax controls over market access of nongovernmental investment and stimulate it.
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we should energetically change growth model and speed of structural adjustment of industry. china's productive forces develop on multiple levels, which gives us plenty of room to maneuver. industries where the traditional , labor-intensive or capital-intensive or have room for development. the important task is to optimize resource allocation and distribution installed the following problems of production capacity, the core technology, productions of no value added, both level and redundant industrial projects in different regions having similar industrial structures. they must accelerate the transformation and upgrading of
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the industry and develop new and high-tech industries and raise product's polar team competitiveness. but they stress on guidance encourage prices, acquisitions and reorganizations across industries, regions and ownership and allow market forces to determine price of success or failure. we should promote sound development of industries with a focus on expanding to share in domestic markets, making breakthroughs in nature and key technology, which promote integration of i.t. application and industrialization more quickly to next-generation information and communication infrastructure and better use of information technology. we should develop and expand the service sector and attach equal importance to producer and consumer service industries and to modern and traditional service industries.
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in response to the above expectation of having a good living environment, we should greatly strengthened ecological improvement and environmental protection. the state of the ecological environment affects people's well-being and also posterity and future of our nation should adhere to the basic state policy of a conserving resources and protect team environment and to promote circular and low carbon development. the degree of energy resources give priority to spending energy and industry and construction on public institutions.
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we should restrict total energy consumption and reduce consumption as well as carbon dioxide emissions. we should speed up adjusting the economic structure and distribution imap grading related standards, practices and laws and regulations. we should have thought a measure to prevent and control pollution and change the way we work and live. we should be determined to solve the problems and slow pollution to affect the people is vital interest. we should improve quality and safeguard to how and give the people hope for concrete action.
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we should do our geological work while and become better able to prevent and mitigate natural disasters. we should optimize development of the country's territory on a proper pace. we should string then the management and the economy to become better able to exploit the ecological environment. by mark we should continue to entertain the strategy for developments. and promote balanced development between regions.
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we should make full use of the comparative strength of each region that plans comprehensively and give guidance tailored to different circumstances. we should give high priority to large-scale developments of the western region so we can revitalize the bases in china and the rights of central reasons and support the eastern regions which keep the lead in development. we should keep the revolutionary base areas, at minority areas and the poverty with acute difficulties. second, strengthen the foundation for agriculture and rural development and promote urban and rural developments. china's agriculture developed faster and rural areas have gone over significant changes than
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any other. agricultural developments have now entered a new stage in which overall agricultural production costs are rising and the supply and demand of agriculture products and the role of social structure is undergoing profound changes and integration of rural development is going up and the nature and difficult problems we face and moderate societies in all respects and areas. it makes issues related to agricultural areas for number one priority and all i work as scientific completion draws from our historic experience and a long-term guiding principle applicable to the present and the future. [applause] [speaking chinese]
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>> translator: the system essential to maintaining world stability and ensuring china's long-term develop and. it is to go and teach farmers insurance and its main object is to ensure the farmland remains at or about the red lines. we should continue to make contracts the basis of the operations and support the development of various farms and multilevel commercial organizations that provide the agricultural facility and gradually establish a system of intensive agricultural operations that specialized well organized and commercialized. we should always protect legitimate property right and keep them motivated.
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it should always give high priority to bring production and develop high-yield asic farmlands, spread advanced technologies come increase overall agricultural production and ensure the supply of grain and other agricultural products. we'll continue to increase rural areas and improve infrastructure and basic services in rural areas and promote integration of urban and rural developments. we should build a new type of relations between urban and rural areas in which industry promotes agriculture and development of industry and agricultural reinforcing each other. we should take affect mashers to keep the agricultural stable in new farmers.
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urbanization is in historic task and urbanization agricultural can brief each other. we should concern to the objective law to objectives of organizations and carry out actively yet fervently. we should promote sound development of work in a station that making plans scientifically, balancing geographic distribution, coordinating urban and rural development using land economically and mashers to local conditions. said they should be cut at an appropriate scale and so we played a role in driving the development of their surrounding areas. small and medium-sized cities should become better able to develop industries and provide public services, create jobs and attract residents. we should refund the household
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registration system and institutions and register eligible rural workers to the progressive expansion of coverage of basic public services in other areas to permanent resident and creates an applicable institutional environment for freedom of movement for people to live and work. the improving village conditions should approve distinctly of rules later, like their environment more livable and ensure organization and the new countries reinforce each other. third, give high priority to ensuring well-being and improving the material and cultural lives. an important lesson i learned in our response to the break of the
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city are syndrome in 2003 is that economic development and social development need to be coordinated. in developing the economy in the years we have placed greater importance in ensuring a improving people's well-being and developing social programs and government has made great efforts and provided more funding in this area than ever before. these remedying effects have resulted in coordination of china's economic and social development. the structure of chinese society is formed an organization and interests in society have all undergone a profound changes in social problems have increased remarkably. they must make ensuring and improving people's well-being to all the governments work to get higher priority to it and strive
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to strength and social development. we should do all we can to increase employment. we should persevere in implementing the strategy of giving top priority and adopt a more proactive policy, which will create more jobs by maintaining a stable economic growth and adjusting structure and provide better skill training to help people find jobs or start their own businesses. we should increase government spending and policy support and improve the employment system to stimulate employment by encouraging business startups and finding jobs and stimulate sustained steady increases in urban and rural incomes. we should improve the social security system. we should continue to follow the
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policy of making coverage universal and ensuring basic care and providing multilevel sustainable social security. we should expand the coverage of social security of the overall management of accounts to higher-level authorities embrace the benefits and improve and coordinate all social security programs and make social security more equitable and sustainable and facilitate a straight transfer of accounts between locality. this basic pensions should be raised another 10% and allowance for urban and rural residents and subsidies should also be further raise. we should develop reform and development of medical to consolidate and improve the system for basic drug and new operating mechanisms of community levels and health care
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institutions for the form of hospitals and encourage nongovernmental bodies to operate hospitals. we should support traditional chinese medicine and at a minority medicine. we should improve the universal system established as a mechanism to provide assurance in aid for treating major diseases in conduct a pilot project to ensure against childhood leukemia and other serious diseases. government subsidies for the new care system and basic insurance will be raised to 241 to 280 persons respect doubly in comparison payment standards for public health services should be from 21 to 31. we should progressively improve
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the population policy and adhere to the basic state policy of the family planning response to changes in the size and structure china. we should comprehensively solve problems relating to house, structure and graphic distribution of the population and promote long-term balanced population device meant. the development of services protect the rights and interests of women and minors and take an interest and support programs to benefit people with disabilities. we should strength dynamic innovation and social management. we should improve the way government provides public services, strengthen the system of social management and services at community level and improve governance by villages and residents to ensure people directly exercise of democratic rights in accordance with the laws by managing the public and
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running public service programs. we should reform the system for social organizations and guide orderly development. we should establish a mechanism for safeguarding people's rights in inches and improve the integrated system of mediation by the people and judicial mediation. strengthen the system of assistance and carry out reform to handle people's complaints about the call and the: litigation related issues. we should maintain open regular channel for people to voice their demands and coordinate the people's interest and protect their rights and interests to improve the mechanism for assessing potential policy paid to social response mechanism. it is to preserve law and order and promote social harmony and
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stability. food and drug is a prominent issue of widespread concern. we should reform and improve mechanisms for overseeing and supervising food and drug safety and overall coordination. we should require enterprises to assume primary facilities for exercise strict oversight throughout the whole process from production to consumption and establish a scientific system with china's national conditions to better ensure food and drug safety. we should strengthen the public sector system and improve workplace safety conditions to specially major in various funds. what the regulation of the real estate markets and strengthen construction of subsidize speculate of investment and
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housing demand to improve the accountability system for housing prices in the real estate market and strengthen mechanism for sound development. we should continue government subsidized housing said they are satisfied with. this year, the should complete government subsidized housing units and construction of another 6.3 million units and dilapidated should continue. science and technology play a fundamental guiding a global role in the country's modernization. coulter is essential for the long-term nation and gives the
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people a sense of belonging and occupy a position of importance. we should to continue to give top priority to developing education and new government expenditures on education already exceeds 2 trillion. this number should continue to increase. they must make good use of such funding. we need to have comprehensive asset tatian replied and solve major issues of public concern. we should balance the development and accelerate development of education and raise the quality of education of all types and all levels. this should help make education more applicable and provide support for china's development.
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we should give reform of the management system for science and knowledge she and integrate science and to elegy more closely with economies and established a technological innovation system based on enterprises and guided by the market in the enterprise university and research institute. we should focus on priority areas of strategic importance in long-term developments in strengthen basic research in leading technology is. we should improve overly sharing scientific and technological resources and the taxation from the banking, industrial technology and personnel policies for development and adaptation of these advances creates a fair and open environment for making innovation to technicians fully motivated and unleash creativity
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of the whole society. we should effectively advance development of the culture sector. pushed and corporate development of the culture sector for economic and social development and include them in the system for evaluating the performance of government at all levels to promote cultural prosperity in the sector. the government rule responsibility to develop cultural programs and accelerate key cultural projects for the people and improve the system of public health services. we should extensively carry out activities that promote comprehensive development of both recreational sports. we should greatly increase public morality, professional at six and personal integrity. we should promote integrity to
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improve business and public integrity and social conduct. boy, am reform and opening up the political courage and vision . reform is a fundamental force that drives china's development and progress and adhering to reform to a quarters. has entered a crucial stage of reform unless further emancipate our minds to carry out all around economic political, cultural and social reform and constantly deepened none.
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[applause] we need to improve the social market economy. we should unwaveringly consolidate and develop the public or the economy and encourage and support the development to demand public areas to foster a structural environment in which economic entities at the different forms of ownership has equal access to set various production in accordance with the law on the level playing field to enjoy equal protections. a shaky performance of enterprises and industries in the taxation systems in just relations between the central government and local government concerning financial risk losses and powers. we should improve the public finance system, institute a
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system of local taxation and establish a taxation system conducive to optimizing the economic structure and social standards. we should reform the financial system and increase the modern ranch assistant to support development of the rural economy. we should raise competitiveness of the banking securities and insurance industries and accelerate development of a multilevel capital market. we should carry reform to make interest rates and r&b exchange rates more market based and extend broader use and achieve compatibility. we should deepen reform of the investment financing system with price reform and improve the products. we should continue to actively reform public institutions. the income distribution system is a basic system of vital importance for economic and
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social development and an important cornerstone of the market economy. we have formulated guidelines of deepening reform of the income distribution system and we now need to promptly formulate specific policy, ensure that institutions are established and policies are implemented as problems in income distribution and narrow the income gap so that the fruit of development are more shared by people. [applause] we need to advance development of socialist democracy and socialist rule of law. we should ensure that people occupy principal positions in a people's democracy more
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extensive, fuller and scope and founder to ensure people enjoy extensive rights and freedom prescribed by law and promote people's well-rounded development. we should govern the country on the basis of law and fully respect the authority of the constitution law to ensure that policymaking, implementation and oversight does constrain each other and function that government body exercised in accordance with statutory mandates and procedures. we should continue to transform government functions, separate government administration from the management of state assets, public institutions and social organization and give a well structured efficient conservatory asset government that has scientifically defined
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functions and the people are satisfied with. we should improve the conduct of our work, making close ties to people's dedicated hardware complained of being an opposed extravagance and waste and eliminate bureaucratic practices. we should uphold the democratic oversight from a legal oversight and public opinion-based oversight to improve the system of checks and oversight of the exercise of power to ensure people exercise power and power is exercised in a transparent manner. [applause] we should unwaveringly combat corruption, for instance, political integrity established institutions to excessive concentration of power and ensure that officials are
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honest, and political affairs handled with integrity. profound changes in domestic and external environments please new and higher requirements on china in developing an open economy. we should adhere to the basic policy of opening up and implement a more proactive opening up strategy. we should keep exploits stable and expand imports, which raise the quality returns of foreign trade rather than increase its volume and rate its overall competitive advantages relying only on cost and price advantages. we should make china's exports more competitive in terms of tech elegy can the brand, quality of service. we should simultaneously as foreign investment in china make investment overseas and support
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the chinese enterprise into a global to create a space for economic development. we should simultaneously open up in coastal areas and open and land border areas to bolster a balanced and coordinated opening up in which all regions have their own distinctive features and have a clear division to cooperate with each other. we should continue to open up to developed and developing countries and expand and deepen common interest with all other parties. we should fully and faithfully implement the party's policy on ethnic groups and adhere to and improve the system of regional at autonomy and strengthen and develop ethnic relations of equality, unity, assistance in harmony.
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we should fully implement the party's basic policy on religion, promote harmonious relation and get religious figures have believers actively involved in economic and social development. we should implement the policy of the party and overseas affairs in support overseas chinese as well as return cheney and interested in participating in china's modernization. we should accelerate modernization of national defense in the armed forces so as to strengthen china's defense and capabilities. we should uphold china's sovereignty, security and integrity and ensure its peaceful development. [applause]
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we should adhere to the principles of one country two systems, the people of hong kong governing hong kong and macau governing the cattle entering a high degree of autonomy. they should rally of compatriots in hong kong and macau and maintain long-term prosperity and stability of the two regions. we should adhere to the policy of the central central community in taiwan related work of a fully implement it again and cultivating relations and strengthen and deepen political come it cannot make, cultural and social foundation for their growth. can accomplish reunification in the cause of working together to achieve the great rejuvenation of the chinese nation. [applause]
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we should continue to hold high the banner of peace, development , cooperation and mutual benefit and pursue peaceful development to adhere to our independent foreign policy of peace and promote peace and common prosperity in the world. we have achieved remarkable progress along the party socialism with chinese characteristics in the past and now we envision an even brighter future for our great country. and the leadership of the party central committee as general secretary that is to unite as one and work hard to finish building a moderately prosperous
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society and our respects and achieve the great rejuvenation of the chinese nation. >> this is the fifth time i've had the privilege to take part in this event in every year i look forward to it because it shows that our most basic values look like when they're put to the test. when these women witnessed horrific crimes that they disregard for basic human rights, they spoke of risking everything they had to see that justice was done. when they saw their communities are there countries were ignoring issues like violence or women's rights, they gave this issues that face and a voice and with every act of strength and
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defiance, with every blog post, with every community, and these women inspired millions to stand with them and find their own voices and work together to achieve real and lasting change. and that is truly the power of the international women of courage award, that this is not simply an honor bestowed upon a few, but a call for all of us to open our eyes to the injustices around us and ask ourselves what kind of courage that got insider on hiring. and that is the lesson we can learn from the journalists who speaks out against torture and racism, from the poet who takes to twitter to make a stand against oppression, from the mother whose son was murdered to channel surf grief into nationwide movement for change. that is the spirit we celebrate today and i missed the potential that lies within every woman and
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every girl. the potential to stand up, to demand action and build a better world for next generation. >> next come the new federal health care line out the affordable care act will impact consumers, employers and insurers. this discussion gives up actions taken by the government in the health care industry tunic health care more affordable in
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the the new market. the discussion was moderated by donna shalala under president clinton. she's currently president of the university of miami which has said this hour in fifth team in the event from coral gables, florida. >> okay, good morning. i am the president and chief executive officer of the memorial health care system in broward county. i want to first commend the first panel for its invigorating discussion and think this panel sponsored, ernst & young for his sponsorship. this session will explore how insurance companies are strategizing to comply with the new regulation. it will examine a role of health care exchange for response by employers to be accountable care act. our panelists and you can see
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extended bios in your handouts. first we have care and 898, the president and ceo of america's health insurance plan, the national trade association representing the health insurance industry. in phelps, who leads the health care practice the washington council, ernst & young and we have the privilege to be moderated by president, donna shalala, who as it is also former secretary of health and human services in the clinton administration. let's read our panelists. thank you. [applause] >> will start with karen and connie. >> good morning, everyone. it's such a pleasure to be here first of all from the standpoint of the climate. anyone coming from the east coast today said breath of fresh
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air. but that's not the reason the abyss came. we came for donna shalala. i started to feel been there done that because the guys made the point, but just stay with me. a gust of all you see here on behalf of your wonderfully energetic president is exactly what we saw in washington during her tenure as secretary of health and human services. we also saw not only gusto, but we saw heart, without equanimity and missile fairplay. for any of us coming from washington today in these times, those are the qualities all of us respect and we treasure in love. so on behalf of everyone in washington, you hear from democrats, republicans, independents and anybody else who hasn't really declared that donna shalala is the real thing. it's a pleasure to be here with
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you. [applause] we have 10 minutes, which is very challenging in terms of the topic we've been given. i'm going to put my watch here so i'm also careful about not exceeding time in making sure you have plenty of time to ask questions. what are they to talk about this morning is not only how we're preparing for the new market for new opportunities, new challenges, but i'd like to start with the one of affordability. the reason i want to start their is whether or not we are successful in interim of this new world and i don't mean simply health plans that providers, hospitals in the audience, consumers employers, if we are to be successful in getting people into the system, the crucial thing is going to be affordability. and that is determined by cost.
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that is where they to start because unless the system is affordable, people will participate. if people don't participate, we will be destined to repeat what happened at the state level. in every case, states the past market reforms without having everyone participate what happened in every case including massachusetts the first time around, what you saw this tremendous increase in cost from the people not participating in major coming major problems in terms of the market dysfunction. nobody wants that. i want to start this morning by talking about affordability, talking about cost and want to specifically talk about the policy conundrum with respect to cost containment is my cost containment of someone else's revenue reduction. we do not talk about that in the public policy community.
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unless we internalize that and think about how to address that, the standpoint of each and every stakeholder were not going to be eliminate progress and hit an affordable system. anything to begin the lesson of what we've seen now over years in the health care community, but as we look forward to the payment arrangements that marked increase in pat thoughtfully talk about is the promise of how can we find a direction and a path to progress. and i think it means stitching milk in the system, guess i'm saying that very directly. we can't build. we can't get there from here building on an old-fashioned fee-for-service system would provide incentives to do more and charge more. in the health care reform discussions, one of the major issues if you can let back in
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some of the things that should've been typed about, one of the major challenges in health reform discussion with an association of cost at any of cost. the premiums reflect what we are being charged. that's how we build premiums. we haven't had the discussion about unit costs. that's the problem, ladies and gentlemen today. it costs too much. what were being charged per year from hospitals next year, 10% increase in the 15 increase for specialty chart prices soaring. they put all that in any of premium increases that are unsustainable. we shouldn't just focus for the length of premiums. the reason the policy community we haven't gotten under that is because it's one of the hardest things to do to do with the principle of cost containment to someone else's revenue reduction. but there's hope in the health and community around the
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country, wonderful representations of that you heard this morning. what we see our changes on the supply side and a demand-side working together. on the supply side, moving from a retrospective payment system to a payment system, moving towards medical homes and dissenting positions to partner with health plans with their patients to detect diseases at an earlier stage to prevent catastrophes from happening and move towards a more prospective payment system. were talking about and seen bundling not just her hips and joints, but now cancer care in a number of other conditions. hospitals working with health plans in the state to pioneer new payment systems. and also, hospitals and health plans work together to look at global payment systems, versus
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retrospect you can help plans defined-benefit structures that invent that. mark and chris.about cheering and pats it is on the part d program. we are importing that technology into basic major medical assistance so consumers have transparency about what works and begin to make choices superb way for them. what works, how much it costs, with the best care this will not only deal with quality improvement, safety improvements , cost reduction, but also shrink variation, and another challenge in the delivery system. in terms of health plans and new payment systems in bringing those not only to the commercial population under 65 to employers and individuals, the public programs they managing and improving care to people duly eligible for medicare and medicaid in giving them a better way to deliver health care,
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medicare advantage is a good part of the florida market, but also individual options they want and partnering with many of you in the audience in the stakeholder community on the provider side. that's the news story of health care. in addition, the health plan has since the days pass legislation was signed in march 2010, our health plans have set up special unit, any one of my colleagues will talk about this interdisciplinary units to make sure we've are ready to do what is expected of us, which is quite considerable. all over the country, health plans have been pedal to the metal with respect to what do we need to do, how do we provide the best advice and counsel to regulators crafting the regulatory architecture. how can we identify things ahead of time that will minimize
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disruption and improve affordability and that so we spent the last two years doing. on the other hand at the same time as we look forward to 2014 beginning in pat pattison has questions are also seeing challenges in iowa to focus on in a few minutes i have left. there's always if any and either be concerned about unintended consequences. what we all hope is we can bring people into the system. unless were able to do it affordably, people will participate. so what does it take to get people in the system affordably? is a couple things we need to think about. we need to look at this through the prism of where people are today. the 10 categories of coverage, important benefits without a doubt, any of us who don't have them want them and those of us that have them want to keep them. the question is how we go
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overnight from where people are today in the market, individuals in the market, 18 million by an individual health insurance coverage, going where they are today to the new market and today they buy high deductible catastrophic coverage to protect their families from medical bankruptcy. they don't have those numbers of categories horizontally and they have very high detectable as. you have to broaden benefits and reduce the adductor boatswain coinsurance. again from a patient is, important benefits for the question is how you get there in one fell swoop. this we pay attention to. there's provisions in legislation in terms of how you begin to make it affordable and it's going to strike you as very wonky, but there is a ratio would help lance charged older to younger.

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